CIA snooped on India, Pak via firm that sold encrypted communication devices: Report

CIA and West German intelligence agency joined hands to spy on 120 nations

SWISS-CYBER/ The logo of Crypto AG is seen at its headquarters in Steinhausen, Switzerland | Reuters

About 120 governments, including India, were snooped on by America's Central Intelligence Agency (CIA) in collaboration with German intelligence agency, BND, over half a century. At the heart of the US deceit, exposed in an investigative report by The Washington Post, is a company named Crypto AG, founded by a Russia-born Swiss national Boris Hagelin in 1940 and headquartered at Steinhausen in Switzerland.  

From the 1950s, Crypto AG was the company that provided encrypted devices to governments around the world for safe and unintercepted communication to aid their militaries, diplomats and even spies. Documents indicate that more than 120 countries, including India, its rival Pakistan, Iran, Latin American nations and even Vatican used Crypto AG encryption equipment from the 1950s until the 2000s. 

However, it now emerges that while Hagelin remained the face of Crypto for a very long time, the company was "secretly owned by the CIA in a highly classified partnership with West German intelligence". These spy agencies rigged the company’s devices so they could easily break the codes that countries used to send encrypted messages. "The most closely guarded secrets of the Cold War, is laid bare in a classified, comprehensive CIA history of the operation," The Post says in its report. The report was a joined project with ZDF, a German public broadcaster. 

“It was the intelligence coup of the century,” the CIA report on the operation, codenamed Rubicon, says. “Foreign governments were paying good money to the US and West Germany for the privilege of having their most secret communications read by at least two (and possibly as many as five or six) foreign countries.”

While the incriminating report names India as one of Crypto AG's clients, it is yet not clear as to what extent the Indian messages were read the by CIA. It is also not clear if India continues to use any of the encrypted devices supplied by Crypto. This is the first instance where the CIA has been accused of spying on India. 

The Post goes on to reveal that for a long period, including the 1980s, Crypto accounted for roughly 40 per cent of the diplomatic cables and other transmissions by foreign governments that cryptanalysts at the NSA decoded and mined for intelligence. It was the intelligence input from these devices that helped America interfere in many global affairs. For instance, during the Falklands War, US spies were able to feed intelligence about Argentina’s military to Britain. 

Another instance was when Iranian militants took 52 American to hostage after storming the US Embassy. The same Crypto intervention even tipped off the Americans about former US President Jimmy Carter's brother, Billy Carter, who was working on Moammar Gaddafi’s payroll. Later, the US registered him as a foreign agent. 

The NSA’s eavesdropping empire was for many years organised around three main geographic targets, each with its own alphabetic code: A for the Soviets, B for Asia and G for virtually everywhere else. 

By 1981, Saudi Arabia was Crypto’s biggest customer, followed by Iran, Italy, Indonesia, Iraq, Libya, Jordan and South Korea. The US intelligence owes it to Crypto for decoding almost 80 per cent of Iranian messages. No wonder, by the 1980s, more than half of the intelligence gathered by G group was flowing through Crypto machines, a capability that US officials relied on in crisis after crisis.

Interestingly, the Soviet Union and China kept its safe distance away from buying Crypto's products. However, US spies learned a great deal by monitoring other countries’ interactions with Moscow and Beijing.

Furthermore, according to records, at least four countries—Israel, Sweden, Switzerland and the United Kingdom—were aware of the operation or were provided intelligence from it by the US or West Germany.

However, the German spy agency left the operation in the early 1990s. The CIA took over the German stake and continued snooping operations, until the company's assets were liquidated in 2018. The company’s encryption business was split and sold. However, the entities who bought the assets are now in a fix as they were in the dark about the CIA-BND connection. 

Furthermore, Crypto’s products are reportedly still in use in more than a dozen countries around the world. Its orange-and-white sign still looms atop the company’s longtime headquarters building near Zug, Switzerland.